The effects of demotion on older and younger employees

Purpose - Demotion is sometimes recommended as an instrument for extending older workers' labor force participation. There is, however, very little research on the effects of demotion on employees. The purpose of this paper is therefore to investigate these effects, and to test whether they differ for older and younger workers.Design methodology approach - The data come from a biannual panel study among employees working in health care or social services. There were 45 cases of demotion among older employees (aged 45 or over) and 62 cases among younger employees in the data set. The control group consisted of 7,727 cases in which there had been no change in function.Findings - Employees who were demoted had more feelings of exhaustion prior-to the demotion than employees who did not change function. The demotion only reduced the levels of exhaustion in the case of older employees who moved to a less physically demanding position. Satisfaction with job content decreased regardless of age group or changes in physical workload.Research limitations implications - The number of demotions was relatively small. There was no information on the reasons for the demotion. Therefore, we could not test whether the effects of demotion vary according to the reason for the demotion.Practical implications - In light of the results of this study, employers who are considering demoting an employee should check carefully whether there are other suitable options that have fewer negative consequences for the employee.Originality value - There is very little empirical research on the effects of demotion - this paper fills some of the gaps.